On Jan 13, Verizon Communications Inc. (VZ) announced the launch of its new after-market connected-car service – Verizon Vehicle – at the North American International Auto Show in Detroit. This technology is popularly known as M2M (machine-to-machine communications).
The new service will connect wireless customers with cars and has been designed to provide them with mechanical aid during a breakdown, GPS-directed roadside assistance along with monitoring and tracking of vehicles. In addition, drivers can choose to receive analytical alerts through text, call, smartphone notifications or email and also access help in the event of an emergency.
With this new customer service, Verizon aims to add about 200 million in-service vehicles that cannot connect to a wireless network presently, to its digital network. The service operates through an OBD II (on-board diagnostics) dongle, a Bluetooth-enabled speaker attached to the visor and a corresponding smartphone app.
The monthly service charge for Verizon's new product, aimed at modernizing older cars, is $14.99. Notably, Verizon Vehicle is expected to be available commercially from the second quarter of 2015. The subscription-based service is attuned with any vehicle manufactured in or after 1996, and covers more than 9,000 models.
However, Verizon isn't the only company to target the connected car business. Automakers, mobile dealers and carriers all around the globe are working on highly developed vehicle systems for everything from advanced diagnostics to infotainment. Last week, General Motors Company (GM) – one of the largest automobile producers in the world – launched its new OnStar service that can distribute promotions to connected cars.
Also, recently, AT&T, Inc. (T) entered into partnerships with three large automobile manufacturers to drive the expansion of the connected vehicle technology using M2M communications.
Of late, the text-generation (4G) technology is boosting the growth of M2M segment as it provides exceptionally high speeds. Massive throughput and low-latency period of LTE technology enable easy access for large-scale applications like fleet management, security, automotive, navigation, and video content.
Thus, with Verizon Vehicle, the carrier aims to reach out to drivers who are not connected with the Internet, GPS or cell service and provide at least basic communication services to all vehicles. This will help nurture a safer, smarter and more efficient way to drive and maintain a vehicle while also augmenting driver protection, operational feasibility and savings.
Currently, Verizon has a Zacks Rank #3 (Hold). A better-ranked stock worth considering in this industry over the near term is Vonage Holdings Corp. (VG) which holds a Zacks Rank #1 (Strong Buy).
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